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yield

yeeld /jiːld/

nounverbC1GREGMATTOEFLIELTSUPSC

formalbusiness

The income provided by an investment, typically expressed as a percentage of the investment's cost or market value.

Yield specifically refers to the income component (e.g., interest from bonds, dividends from stocks), not the capital appreciation (increase in asset price).

The story behind the word. The word 'yield' comes from the Old English 'gieldan,' meaning 'to pay, render, or give up.' It has long been associated with producing or providing something, especially crops from land. Its financial sense, referring to the income or profit that an investment 'yields' or produces, developed in the 16th century, extending the idea of production to financial assets.

Word relationships

income: A broader term for money received; 'yield' specifies income from an investment as a percentage.
return (income component): 'Return' is total gain/loss; 'yield' is the income-only portion.

Commonly confused with

return: 'Yield' is the income an investment generates (e.g., dividends, interest) as a percentage; 'return' is the total profit or loss, including both income and capital appreciation.

Word family

yielding (adjective): Producing a specified financial return.

Collocations

dividend yield
bond yield
high yield
low yield
yield curve
yield to maturity

Idioms & expressions

yield to temptation

Example sentences

"The corporate bond offered an attractive yield of 5% per annum, paid semi-annually." Many retirees prioritize investments with a high dividend yield.
"Despite its lower volatility, the government bond provided a modest yield compared to riskier assets." Investors often compare the yield of different fixed-income securities.

Memory hook

What does your investment 'YIELD'? It 'YIELDS' you income! YIELD: what investment 'gives'.

When not to use

Do not use 'yield' when referring to the total return, which includes both income and capital gains/losses.

Fun facts

The 'yield curve' is a graph that plots the yields of bonds with equal credit quality but differing maturity dates.
A 'high-yield bond' (often called a junk bond) offers a higher interest rate because it carries a higher risk of default.